Correlation Between Allianzgi Global and Mfs Technology

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Can any of the company-specific risk be diversified away by investing in both Allianzgi Global and Mfs Technology at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Allianzgi Global and Mfs Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianzgi Global Natural and Mfs Technology Fund, you can compare the effects of market volatilities on Allianzgi Global and Mfs Technology and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Allianzgi Global with a short position of Mfs Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Global and Mfs Technology.

Diversification Opportunities for Allianzgi Global and Mfs Technology

AllianzgiMfsDiversified AwayAllianzgiMfsDiversified Away100%
0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between Allianzgi and Mfs is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Global Natural and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Allianzgi Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Allianzgi Global Natural are associated (or correlated) with Mfs Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Technology has no effect on the direction of Allianzgi Global i.e., Allianzgi Global and Mfs Technology go up and down completely randomly.

Pair Corralation between Allianzgi Global and Mfs Technology

Assuming the 90 days horizon Allianzgi Global Natural is expected to generate 0.28 times more return on investment than Mfs Technology. However, Allianzgi Global Natural is 3.51 times less risky than Mfs Technology. It trades about 0.04 of its potential returns per unit of risk. Mfs Technology Fund is currently generating about -0.06 per unit of risk. If you would invest  1,078  in Allianzgi Global Natural on November 19, 2024 and sell it today you would earn a total of  19.00  from holding Allianzgi Global Natural or generate 1.76% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Allianzgi Global Natural  vs.  Mfs Technology Fund

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-505
JavaScript chart by amCharts 3.21.15RGLIX MTCCX
       Timeline  
Allianzgi Global Natural 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Global Natural are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Allianzgi Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb10.410.510.610.710.810.911
Mfs Technology 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Mfs Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb444648505254

Allianzgi Global and Mfs Technology Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.39-1.8-1.21-0.62-0.02990.561.151.752.342.93 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15RGLIX MTCCX
       Returns  

Pair Trading with Allianzgi Global and Mfs Technology

The main advantage of trading using opposite Allianzgi Global and Mfs Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Global position performs unexpectedly, Mfs Technology can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mfs Technology will offset losses from the drop in Mfs Technology's long position.
The idea behind Allianzgi Global Natural and Mfs Technology Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.

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